Thursday
Jul242008
Do pharmaceutical companies hate sick children?
Thursday, July 24, 2008 at 12:53PM
Mustargen treats rare cancers, Cosmegen treats kidney disease and Matulane treats Hogdkins lymphoma. These miracle drugs have one thing in common. According to calculation from the Pharmaceutical Reseach in Management and Economics (PRIME) Institute, the prices of these drugs have seen increases as high as 8,000 percent.
The Joint Economic Committee held a hearing to examine the skyrocketing prices of certain prescription drugs and its impacts. U.S. Senator Amy Klobuchar (D-Minn.) said that she first became aware of the aggressive pricing practices when she found out the price for a drug used to treat patent ductus arteriosis (PDA), a disorder which prevents holes from healing in the hearts of infants, had increased substantially. According to Klobuchar, Ovation Pharmaceuticals acquired the rights to the drug and increased the price from $100 to $1,875 per three one-milligram units. Klobuchar pointed out that the price charged in the U.S. is 44 times higher than in Canada with no justification for the huge price disparity. Klobuchar also noted that Ovation Pharmaceuticals had been invited to participate in the hearing but had declined the offer.
Madeline Carpinelli, a research fellow at the PRIME Institute at the University of Minnesota, said that ‘extraordinary’ price increases for drug products have been observed in recent years. Carpinelli said that an ‘extraordinary’ price increase is a change of more than 100 percent at a single point in time with some ranging to more than 10,000 percent. Carpinelli emphasized that brand-name drug prices are growing at more than two and a half times the rate of general inflation.
Dr. Alan Goldbloom, president and Chief Executive Officer of Minnesota Children’s Hospital, discussed the drug Indocin used to treat PDA. According to Goldboom, when Ovation Pharmaceuticals bought exclusive rights to Indocin, the price for one unit of it jumped from $108 to $1,500 which is a 1,278 percent increase. Goldbloom was quick to point out that Indocin has been used for more than three decades as standard initial treatment so the dramatic price increase could not be attributed to the high cost of research and development. He also said that there are no other manufacturers of Indocin which means Ovation has a monopoly and can use it as a price-gouge.
Danielle Foltz, the mother of an infant diagnosed with Infantile Spasms, discussed the hurdles faced when trying to obtain the appropriate medication, Acthar gel, for her child. According to Foltz, Questcor Pharmaceuticals had raised the price per vial of the drug from $1,000 to over $30,000. Foltz had read that Questcor promised no child who truly needed the treatment would go without. When she called Questcor, she was told that the approval process would take three days without the guarantee of a positive outcome. Foltz said she was fortunate that their insurance covered her child’s treatment but she also noted that the price of Acthar gel is continuing to escalate.
The Joint Economic Committee held a hearing to examine the skyrocketing prices of certain prescription drugs and its impacts. U.S. Senator Amy Klobuchar (D-Minn.) said that she first became aware of the aggressive pricing practices when she found out the price for a drug used to treat patent ductus arteriosis (PDA), a disorder which prevents holes from healing in the hearts of infants, had increased substantially. According to Klobuchar, Ovation Pharmaceuticals acquired the rights to the drug and increased the price from $100 to $1,875 per three one-milligram units. Klobuchar pointed out that the price charged in the U.S. is 44 times higher than in Canada with no justification for the huge price disparity. Klobuchar also noted that Ovation Pharmaceuticals had been invited to participate in the hearing but had declined the offer.
Madeline Carpinelli, a research fellow at the PRIME Institute at the University of Minnesota, said that ‘extraordinary’ price increases for drug products have been observed in recent years. Carpinelli said that an ‘extraordinary’ price increase is a change of more than 100 percent at a single point in time with some ranging to more than 10,000 percent. Carpinelli emphasized that brand-name drug prices are growing at more than two and a half times the rate of general inflation.
Dr. Alan Goldbloom, president and Chief Executive Officer of Minnesota Children’s Hospital, discussed the drug Indocin used to treat PDA. According to Goldboom, when Ovation Pharmaceuticals bought exclusive rights to Indocin, the price for one unit of it jumped from $108 to $1,500 which is a 1,278 percent increase. Goldbloom was quick to point out that Indocin has been used for more than three decades as standard initial treatment so the dramatic price increase could not be attributed to the high cost of research and development. He also said that there are no other manufacturers of Indocin which means Ovation has a monopoly and can use it as a price-gouge.
Danielle Foltz, the mother of an infant diagnosed with Infantile Spasms, discussed the hurdles faced when trying to obtain the appropriate medication, Acthar gel, for her child. According to Foltz, Questcor Pharmaceuticals had raised the price per vial of the drug from $1,000 to over $30,000. Foltz had read that Questcor promised no child who truly needed the treatment would go without. When she called Questcor, she was told that the approval process would take three days without the guarantee of a positive outcome. Foltz said she was fortunate that their insurance covered her child’s treatment but she also noted that the price of Acthar gel is continuing to escalate.
House Dems Seek “Fairer Pricing” For Prescription Drugs Within Health Reform
A group of Democratic Congressmen introduced proposals on Thursday known as the CARE (Cut Americans’ Rx Expenses) Package. This package would seek to reduce the costs of prescription drugs, and thereby create savings worth $190 billion dollars that could be applied to health care reform.
The package has three amendments which the Congressmen will seek to insert into the legislation. Rep. Jane Harman (D-Calif.) said that Chairman of the House Energy and Commerce Committee Henry Waxman (D-Calif.) agreed to support these proposals during mark-up.
Rep. Peter Welch (D-Vt.) said that pharmaceutical companies “create life-extending, pain-relieving, life-saving drugs,” but also “charge very high prices and have an excessive control over the marketplace.”
Rep. Harman said that the first proposal seeks to reverse a 2003 law that passed 220-215, which prohibits the Health and Human Services Secretary from bargaining for lower prices for pharmaceuticals for Medicare D patients. She said the law represents a “poignant example of Congress’ failure to take meaningful action to rein in drug costs.”
According to Rep. Castor, the bill's second amendment allows a potential public option to “negotiate prices” and to establish a formulary. A prepared press release said that such a formulary would mean that “families who choose the public option are guaranteed the lowest cost for prescriptions.”
Rep. Betty Sutton said that the final provision “will require...drug manufacturers to pay a supplemental rebate when name-brand drugs exceed the current rate of inflation.” She said the companies “won’t have to pay these rebates if they decide not to jack up their drug prices above the rate of inflation.” She added that this proposal will incentivize drug companies to “show reasonable restraint, thereby making prescription drug prices more affordable.”
Rep. Kathy Castor (D-Fl.) noted that Americans pay higher prices for drugs than do consumers in other countries. Rep. John Sarbanes (D-Md.) said that the government has “terrific bargaining power.” He wondered “why shouldn’t the government in dealing with the pharmaceutical industry be able to go into the marketplace and use that bargaining power on behalf of seniors, on behalf of working families across the country?”
The members of Congress proposing this legislation include Reps. Jane Harman (D-Calif.), Anthony Weiner (D-N.Y.), Kathy Castor (D-Fla.), John Sarbanes (D-Md.), Betty Sutton (D-Ohio), and Peter Welch (D-Vt.).